- Price
- $295.17
- Fair value
- $325.00
- Discount
- 9.2%
- Uncertainty
- Medium
- LSEG rating
- 2.19
- Moat
- Wide
- Next earnings
- 2026-11-05
- Next earnings is estimate
- No
- Company name
- Air Products
- Sector
- Industrial gases
- About
- Air Products makes and sells industrial gases, such as oxygen, nitrogen, argon, hydrogen and helium. It builds large plants next to customer sites, such as refineries, chemical plants and semiconductor factories, and supplies them under long-term contracts. It also delivers gases in liquid form by truck and in cylinders to smaller customers. It makes money from these contracts and from the price of the gases, and many on-site contracts pass energy costs through to the customer. It reports segments by region: Americas, Asia, Europe, and Middle East and India. In fiscal 2025, which ended on September 30, 2025, sales were $12.0 billion and adjusted EPS was $12.03. It owns one third of the NEOM Green Hydrogen Project in Saudi Arabia, which it consolidates.
- Thesis
- Air Products trades at a discount because investors doubt the returns on its large clean hydrogen investments. In fiscal 2025, it recorded about $3.7 billion of pre-tax charges for business and asset actions. On June 30, 2026, it stopped the Louisiana Clean Energy Complex and a liquid hydrogen plant in Arizona, with up to $2.9 billion of more pre-tax charges, because the expected returns were too low. The NEOM project in Saudi Arabia is still open: Air Products is to be the only buyer of up to 1.2 million metric tons a year of renewable ammonia, and it must sell this product into a market that is not yet proven. These projects also raised debt to $17.7 billion at June 30, 2026. For the gap to close, NEOM must start commercial production in 2027 and the Yara agreement must be final, capital spending must fall from about $3.5 billion in fiscal 2026 toward about $1.5 billion a year for industrial gas projects, and free cash flow must rise. The core business must also keep growing, as it did in Q3 fiscal 2026, when adjusted EPS grew 12%. The first test is the Q4 fiscal 2026 report and the fiscal 2027 guidance on November 5, 2026. The second test is the start of NEOM production in 2027. If capital spending falls and NEOM sells its ammonia, the gap can close over the next four to six quarters. The main risk is that NEOM ammonia sells at low prices and causes more write-downs.
- Risks
- Air Products is to be the only buyer of up to 1.2 million metric tons a year of renewable ammonia from NEOM, which is expected to start production in 2027. The market for green ammonia is not yet proven. If prices are low, Air Products can lose money on this product and record more charges.
Air Products recorded about $3.7 billion of pre-tax charges in fiscal 2025 and up to $2.9 billion in Q3 fiscal 2026 for projects it stopped. More exits can bring more charges and lower confidence in how management selects projects.
Debt was $17.7 billion at June 30, 2026, after years of high capital spending. Higher interest rates raise the cost of new debt, and high debt limits the cash for dividends and new projects until capital spending falls.
Merchant gas sales and helium depend on industrial activity. A slowdown in manufacturing can lower volumes and prices.
- Balance sheet
- Cash: $981M
Debt: $17.7B
Net debt: $16.7B
Debt due within 12 months: $896M
At June 30, 2026, Air Products had $980.5 million of cash and $17.7 billion of debt. Debt was $126.7 million of short-term borrowings, $769.5 million of current long-term debt, $16.6 billion of long-term debt and $186.2 million of long-term debt to a related party. Air Products consolidates the NEOM joint venture, in which it owns one third. Interest expense was $153.4 million in the nine months to June 2026. Capital spending is expected to be about $3.5 billion in fiscal 2026, down from about $4.0 billion in the earlier plan, and management targets about $1.5 billion a year for industrial gas projects after that. Air Products paid $1.2 billion of dividends in the nine months to June 2026.
As of 2026-06-30.
- Checkpoints
- Nov 5, 2026: Q4 fiscal 2026 results and fiscal 2027 guidance. Pending. Watch: Fiscal 2026 adjusted EPS within $13.39 to $13.49, fiscal 2027 guidance with EPS growth and lower capital spending, and a final Yara agreement pass; new project charges or higher capital spending fail.
2027 (estimate): NEOM commercial production starts. Pending. Watch: Commercial production in 2027 with signed buyers for the ammonia passes; a delay or ammonia sales at a loss fails.
- Recent events
- 2026-10-06: Air Products said that it will report Q4 fiscal 2026 results and hold a call on November 5, 2026, at 8:00 a.m. Eastern time.
2026-07-30: Air Products reported Q3 fiscal 2026 results. Sales were $3.16 billion, up 5%, with volumes up 3% and prices up 1%. Adjusted EPS was $3.47, up 12%. GAAP EPS was a loss of $6.47, because of about $2.9 billion of pre-tax project exit charges. The company raised its fiscal 2026 adjusted EPS guidance to $13.39 to $13.49 and lowered its fiscal 2026 capital spending to about $3.5 billion, from about $4.0 billion. Its Taiwan business, Air Products San Fu, agreed to build four air separation units for a semiconductor expansion.
2026-06-30: Air Products said that it will not continue the Louisiana Clean Energy Complex, because the expected returns did not meet its criteria. It also stopped a liquid hydrogen plant in Casa Grande, Arizona, and some smaller projects, with pre-tax charges of up to $2.9 billion. It said that it is finalizing an agreement with Yara for renewable ammonia from NEOM, where Air Products is to be the only buyer of up to 1.2 million metric tons a year. The NEOM plant was more than 90% complete, with commercial production expected in 2027.
2026-04-30: Air Products reported Q2 fiscal 2026 results. Sales were $3.2 billion, up 9%, and adjusted EPS was $3.20, up 19%. It raised its fiscal 2026 adjusted EPS guidance to $13.00 to $13.25. Samsung selected Air Products to build and operate gas supply facilities for a new semiconductor factory in South Korea.